This news service interviews a consultancy CEO about the need for advisors to become more systematic and intentional in the way that they market their services, serve clients and build a business. The firm in the interview is Ficomm Partners.

Relying on traditional word-of-mouth referrals is not going to be sufficient for building a client pipeline for RIAs and other wealth managers. Practitioners must become more intentional in the way that they market themselves, Ficomm Partners, a consultancy based in Irvine, California, says.

The firm recently issued new research, The Great Marketing Mismatch: 2024 Financial Advisor Growth Marketing Study, in which it pointed to a disconnect between financial advisors' marketing strategies and investor preferences. This 21-page study, taking views from 437 advisory firms, builds on Ficomm's July 2024 consumer research about how advisors can improve the alignment of their marketing efforts with client expectations.

The study found that only 29 per cent of consumers require a personal referral to choose an advisor; 45 per cent of consumers choose an advisor based on digital marketing; however, most firms still focus on referrals and neglect digital marketing; top-growing firms are less reliant on client referrals; and the highest performing businesses generate growth from multiple marketing channels, with a significant difference coming from non-referral marketing. The top-performing firms are also seeing more success in growth through client referrals and COI referrals.

Since the dramatic move toward remote working during the pandemic, the way that advisors engage with clients and find news ones must change, Meg Carpenter (pictured), founder and CEO of Ficomm, told this news service. Carpenter, who started her business about 12 years ago, works with advisory firms to use marketing to deliver organic growth.

“When I started working in this space, marketing was an afterthought,” she said. 

“It is urgent and important for wealth management to elevate marketing as a vital business function, with marketing strategy being the number one need. There are many marketing tools and marketing tactics being used by wealth management firms, but when implemented without strategy, the tools and tactics are ineffective. I believe the number one concern of wealth management executives today needs to be well researched, critically applied, clearly documented, business aligned marketing strategy,” she said.

The way that firms build trust has changed, as have the preferences of consumers, Carpenter continued. “Before Covid, people wanted to meet in person. Today, people are very comfortable building trust online,” she said.

At the core of the issue is organic growth, which, as Carpenter characterized it, is “not that great.”

The industry is going through considerable M&A consolidation – see here â€“ and rising market levels can give the impression of a rising tide of wealth and, of course, there’s the endless refrain of inter-generational wealth transfer. But when such issues are stripped out, the underlying growth rate is not particularly stellar.

Carpenter points, for example, to data showing that in 2023, new client AuM grew on average 5.7 per cent. (Source: True Ensemble™ Data Insights 2024 conducted by BlackRock® and The Ensemble Practice | Organic Growth Report.)

Systematic
Carpenter said advisors should become more intentional and disciplined in how they use referrals.

A key is to have advisors who want to work with specific clients; data can help make it easier to know how to match up clients and advisors more accurately, she said. “I want someone who will work with people like me,” she said. Adding to that, clients need to believe that they are truly being “seen” by an advisor, she said. “Marketing has to be authentic.”

Carpenter talked about how advisors can learn from case studies that illustrate the benefits of smart marketing; it is also important to have case studies that illustrate the kind of people that an advisor is aiming to attract. (To take a different case, there is no point in a health coach depicting super-fit people on a website if this isn’t what his or her typical trainees look like.)

What makes people approach Ficomm? 

“There is usually a pain point – strategy failures, overreliance on founders for rainmaking, or stagnant growth,” she said. 

“There is, however, a predisposition to think of technology as a solution. We think it is a tool, but it must be part of a wider strategy,” she said.

Talk of technology inevitably opens the topic of AI and its use cases (this news service is exploring this topic during February – see an example here). “There are a lot of AI tools available today to help advisors rank their pipelines [of clients], such as which ones to go after first,” Carpenter said.

She gave examples: “Platforms like Catchlight use AI to help advisors predict which leads in their pipeline are most likely to convert. This allows advisors to be more efficient and to have higher conversion ratios. In addition, tools like Catchlight can deliver key insights into the leads so advisors can be targeted in their approach.”

There is much that can be learned from sectors outside wealth management; Carpenter warmed to the theme, giving the example of TikTok and the rise of influencer brands. “TikTok offers a clear demonstration that a broad base of consumers are building trust with brands online, and making buying decisions online,” she said. 

“While very few financial advisors care about TikTok, and even fewer are using it, the growth and engagement on TikTok correlates with the consumer data in the Ficomm report – people are building trust and making buying decisions online,” she said. 

“With over 1.04 billion active users spending more than 95 minutes a day on the app, TikTok influencer growth is a key driver of purchasing decisions. Seventy-eight per cent of users report buying a product after seeing it promoted by a TikTok influencer,” she said. (Source: How Brands Can Benefit from the Rapid Growth of TikTok Influencers to Drive Sales, by Upinfluencer, September 2024, www.upfluence.com)